Post Office Still Seeking Rate Hike for 2011

WASHINGTON (AP) — The post office is trying again to get a rate increase next year.

The agency said Friday it is appealing the Postal Regulatory Commission's rejection of its requested increase.

The post office had asked for a 2-cent increase in the current 44-cent price for First Class stamps starting in January. Officials said the increase would help compensate for increasing losses caused by a drop in mail volume as a result of the weak economy, and a shift in communications and bill paying to the Internet.

The commission rejected that request on Sept. 30.

The Postal Service said it will ask a federal court of appeals in Washington to review of the commission's interpretation of the law that governs how prices can be set.

The post office argues that the commission misread the statute and applied an incorrect standard in evaluating the request for a price increase.

"We have a fundamental disagreement with the PRC's interpretation of the law," Postmaster General John E. Potter said in a statement. "This action is an investment in our future. We need to understand and define the rules under the current law should the Postal Service find itself in a similar situation in the future."

According to the post office, the rate increase would generate about $2.3 billion in added revenue.

The post office is facing a $6 billion loss and has cut staff, taken steps to close offices and asked Congress for permission to reduce mail delivery to five days a week.

The post office is an arm of the federal government, but does not receive tax dollars for its operations.